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Types of Benefits and Risks You Need to Know Before Investing in The Cryptocurrency

Investment products and commodities are becoming easier, more diverse and, of course, more sophisticated. Cryptographic investment is one of the successful means of investing due to the sophistication of the technology that exists today.

Cryptocurrency or cryptocurrency investments are a type of investment that offers high returns. Cryptocurrency itself is a digital currency that exists and can only be used in cyberspace. Cryptographic investment, especially Bitcoin, was first introduced by Satoshi Nakamoto in January 2009.

It is used for a variety of transactions, from purchasing game services and accessories to shopping for items to wear. From there until the advent of other cryptocurrencies, buying and selling Bitcoin became more and more popular. In addition to the very popular Bitcoin, other cryptocurrency examples are Ethereum, Ripple, Litecoin, Dogecoin, mrai and Dashcoin.

Cryptocurrency as a Popular Investment Tool Among Young People

Cryptocurrencies are digital or cryptocurrencies that are guaranteed by cryptocurrencies. Cryptography makes it almost impossible to forge cryptocurrencies. Cryptocurrencies can also be used for transactions such as online payments and transfers from one person to another.

Cryptocurrencies can be used as a means of payment for online purchase transactions and can be exchanged for other currencies such as dollars, yen, rupiah and other currencies.

Since the Covid-19 pandemic, investments have been increasingly idolized by investment enthusiasts, especially millennials and Gen Z, who know what great benefits they can get from investing in cryptocurrencies. Cryptocurrency assets such as Bitcoin, Ethereum and Degocoin are becoming one of the investment methods that investors are looking for.

Cryptocurrency investment is beginning to become the most popular investment method in the country. This can be seen in the number of Indonesian crypto investors, which currently exceeds the number of equity investors. The value of crypto assets has also become very high.

How to Use Cryptocurrency as an Investment

The way to invest in cryptocurrencies is to buy and sell assets on the exchange. The exchange acts like a market, a platform that connects buyers and sellers to transfer crypto assets. Cryptocurrency transactions occur between members of the exchange or between merchant members.

In contrast to trading on stock exchanges, where investors have to go through brokers as intermediaries, trading is done directly between investors on crypto exchanges. There are no intermediary brokers for trading on the Bitcoin exchange.

Bitcoin or crypto assets are stored in a “wallet”. It is stored in a wallet or vault just as we have money, except that Bitcoin is stored digitally. The wallet is provided by the exchange or investors can have their own wallet. Just like a customer depositing money in a bank or home.

In order to trade crypto assets, investors need to select a “pair” of coins to be traded. Exchange offers different pairs on the platform. An example is Bitcoin / USD (BTC / USD).

Since Bitcoin transactions are conducted between exchange members, the prices for buying and selling Bitcoin may differ between exchanges. Investors can monitor it at any time on the internet to find out where the most competitive Bitcoin prices are.

Below is the order of the process for opening a new account for investment and cryptocurrency trading.

  1. Open an account on the Bitcoin exchange or Bitcoin exchange.
  2. Get KYC verification
  3. Make a deposit (USD and crypto)
  4. Please select a crypto asset pair
  5. Start ordering
  6. Next, we will make a sale transaction
  7. Withdrawal / withdrawal
  8. Payment of fees and commissions according to the number of transactions
  9. Transfer the crypto assets to the wallet where the crypto assets are stored.

Choose the trading function for those who want to concentrate on cryptocurrency trading.
The whole process runs online without including personal KYC data or mobile phone numbers. If you don’t want to use your bank account to withdraw your assets, you can transfer your assets to a PayPal account, digital wallet, etc.

Types of Crypto Investment

Don’t get me wrong, for those who just know that crypto investment is only Bitcoin. Other types of crypto investments to try are:

1. Bitcoin

Bitcoin is still the very popular first type of cryptocurrency.

This type of cryptocurrency was first introduced and introduced in 2009 by a party named Satoshi Nakamoto. No one knows if it’s the name of an individual, group, or company, and no one knows where it came from.

As of November 2019, more than 18 million Bitcoins have been traded, with a total market value of approximately US $ 146 billion, Investopedia writes. To date, about 68% of cryptocurrencies are Bitcoin.

2. Litecoin

Litecoin is a type of cryptocurrency that was also present at the beginning of digital currencies and has begun to attract the attention of many people.

This type of cryptocurrency existed exactly as a peer-to-peer (P2P) digital currency in 2011, generating new blocks (which make up the blockchain) faster.

Therefore, one of the advantages of Litecoin is that it allows users to speed up transactions without the need for a powerful computing system.

3. Dogecoin

Dogecoin appeared in December 2013. As the name implies, Dogecoin is a cryptocurrency that makes the Shiba Inu a mascot. Dogecoin has a much lower value than Bitcoin. The use of this type of cryptocurrency is typically used for small transactions, donations, and tips.

4. Bitcoin Cash

Bitcoin Cash was launched in August 2017 and is currently among the top five cryptocurrencies. This type was launched for a group of Bitcoin users who did not agree with some of the applicable rules.

After that, they left and created their own digital currency called Bitcoin Cash. The group also made some improvisations that it was superior to the first cryptocurrency, Bitcoin.

5. Feather Coin

Feathercoin is a type of open source cryptocurrency. This type of cryptocurrency was created in April 2013 by Peter Bushnell, IT Head of Brasenose College at Ofxord University. Feathercoin is similar to Litecoin and is under the MIT / X11 license.

Benefits of Investing Cryptocurrencies

The benefits of investing in cryptocurrencies are:

1. High Return

Cryptocurrency investment is a type of investment that is known to provide high returns or profits in addition to stocks. The price of cryptocurrencies like Bitcoin can rise very dramatically.

In just a few months, its value can reach record highs. Bitcoin prices will rise 354% in 2020, outpacing the returns on other financial assets.

With the right strategy, you can buy currencies cheaply, but you can sell them at high prices like stocks.

2. Universal

The whole world can use cryptocurrencies. Therefore, cryptocurrencies are considered universal because there are no conditions to become a user and even users do not have to use their real names to include personal data.

3. Fast and Easy

Transactions using cryptocurrencies are faster than transactions at banks. For example, an international bank transfer can usually take a day or more. Bitcoin transactions, on the other hand, only take a few minutes to an hour.

4. Transparent

All cryptocurrency users can see all transactions made. However, of course, because it is in the form of numbers without an ID, the user cannot know who made the transaction.

5. Can Be Used as a Payment Tool in Many e-Commerce

Bitcoin cryptocurrencies are not common today, but can be used as a means of payment in some digital transactions.

PayPal, the world’s largest online transaction payment tool, already accepts Bitcoin payments. PayPal users can save and trade Bitcoins on PayPal.

It can be used as a payment method for online buying and selling of some international / international e-commerce such as e-Bay and Amazon.

6. Safe and Legal

Cryptocurrency investments have gained legal certainty regarding the legality of Bitcoin transactions in Indonesia, making investments in crypto assets safer in accordance with regulations.

Cryptographic Investment Risk

There is no risk-free investment. Here are the risks of investing in cryptocurrencies that you need to know before deciding to buy cryptocurrencies.

1. Very Variable

The phenomenon of rising and falling cryptocurrency exchange rates can occur very quickly and sometimes very extreme. The value can be very high, but then drop sharply. Like equity investments, cryptocurrency investments are characterized by high risk and high return.

2. Vulnerable to Cybercrime

Since the cryptocurrency itself is technology-based, this investment is extremely vulnerable to cyber attacks. If that happens, it will be difficult to get if your cipher is lost or stolen.

There are reports that many buyers have lost their investment due to being hacked. If you want to know more, check out the mediators of robbery exchange cases in different countries, especially in 2019.

3. Lack of Regulation

Cryptocurrency regulations are still quite new in Indonesia. While this regulation provides for the legality of this investment to be solid in Indonesia, there are also many provisions that can pose a risk to clients.

It’s very informative if you understand

There are certainly risks behind the ease and benefits of investing, but that does not mean they cannot be avoided or minimized. By understanding the type of investment that is properly selected, from profit, profit to loss, you can make your investment more safely and comfortably automatically.

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